EZ expected to reach deal on Greek aid

Euro zone finance ministers are likely to approve the next tranche of loans to Greece on Tuesday although the money is unlikely to be disbursed before December and a deal on debt reduction may need further talks.

Officials familiar with preparations for the finance ministers’ meeting expect a “political endorsement in principle” on unfreezing loans to Athens, after Greece completed almost all the reforms that were required.

“It is clear that Greece has delivered,” the chairman of the euro zone finance ministers, Jean-Claude Juncker, told reporters before the meeting.

“We must still reach an understanding on several details and I would expect that the chances are good that we will come to a final and joint solution this evening. But I’m not entirely certain… about the matter,” he said.

Hours before the meeting, set to start at 1600 GMT, views on the outcome were still quite far apart among the individual ministers, but a compromise was possible, officials said.

“I hope, I believe and I want to a find a solution tonight,” French Finance Minister Pierre Moscovici said in Paris.

But Finnish Finance Minister Jutta Urpilainen was less optimistic.

“I’m not at all sure that it will happen. More information is needed before a decision can be made, so the situation is very much open,” she said after briefing parliament in Helsinki.

Greece got a second financing program from the euro zone and the International Monetary Fund in February, but two subsequent parliamentary elections and a deep depression threw its reforms and fiscal consolidation off course.

Lending was frozen in June and to get it going again Greece had to show it was fully committed to a detailed package of economic reforms or “prior actions”.

But the euro zone and the IMF also want to be sure that Greek debt, expected to be almost 190 percent of GDP next year, will fall at some point to a more sustainable 120 percent, so that they will not have to keep financing Athens.

The IMF and the euro zone are at odds on whether to shift the original target date for Greece to do that from 2020 to 2022, torn between the need to retain market confidence and allowing the Greek economy some breathing space.

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